The WTO Strikes Back

The Byrd Amendment—a cynical piece of special-interest pork if there ever was one—will soon, with any luck, meet its well-deserved demise. The 2000 law gave the money raised from import duties on foreign steel to American steel companies, effectively adding another layer of trade protection in the form of an industry subsidy. But last week, the World Trade Organization (WTO) cleared the way for punitive sanctions against American exports, which will hopefully coerce the United States to trade freely and fairly in the future.

America should always be looking for ways to lower its trade barriers, not prop them up. The practice in question is nothing more than an anti-competitive and unproductive subsidy for a sagging industry. America’s steel industry, once a jewel in the West’s industrial crown, is now more like a low-grade glass tchotchke. It cannot compete with more efficient foreign producers, and it never will unless it is weaned of its habit of relying on Uncle Sam for help whenever profits are down.

Needless to say, America is not the only country in the world in which such shenanigans go on, nor is the steel industry the only industry that feeds at the public trough. Other countries grant an incredible degree of protection to certain domestic industries, and they, too, should remove their trade barriers. We are particularly concerned about the “dumping” of cheap steel subsidized by foreign governments that compelled Congress to pass the Byrd Amendment. Dumping is just as anti-competitive as raising tariffs.

It is important to note, moreover, that allowing an industry to weaken should not imply the immiseration of its employees; training programs can successfully and cheaply reinsert entire communities into the workforce. But the poor policy decisions of others and the challenges which free trade poses have no bearing on the clear benefits of free trade itself.

Congress must, of course, repeal the offensive parts of this amendment immediately. Whatever marginal advantage the Byrd amendment might conceivably have given steel companies will clearly be outweighed by the $150 million of punitive tariffs that other countries will soon impose on American goods. Manufacturers in otherwise successful industries do not need such an insult from law-makers.

Moreover, America’s law-makers should be working overtime to not start unnecessary quarrels with foreign governments. The threat of international discord is too important for such pettiness. Whatever one thinks of the last four years of American foreign policy, they have not endeared this country to its global neighbors. Violating WTO rules is not the kind of strategic interest over which America can afford to alienate its friends.

Hopefully this change will be instituted quickly, although in the past we have never failed to be amazed at how easily Congressional leaders fumble even the most obvious decisions, while still finding the time for three square meals of pork a day. But even once this immediate concern is met, the larger promise of free trade must not remain only a promise. The insidious propaganda and strategically placed political clout of industrial conglomerates may win the protectionists a battle here and there, but the future belongs to free trade.